Manufacturing Industries

(asked on 16th October 2017) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the implications for the future of the UK manufacturing sector of the most recent foreign direct investment figures published by the Office for National Statistics.


Answered by
 Portrait
Claire Perry
This question was answered on 24th October 2017

Manufacturing makes a significant contribution to the UK economy accounting for 10% of GVA (£177bn) and 49% of exports (£270bn). Exports of goods to the BRICS group of countries have more than doubled to £29bn since 2007 when this figure was £12.8bn. Manufacturing output in the UK increased by 0.4% from July to August 2017 and by 2.8% over the year from August 2016 to August 2017.

It may be helpful to point out that foreign direct investment (FDI) flow data can be very volatile, influenced by a small number of large value mergers and acquisitions. For example, the strong rise in the value of outward FDI in 2017 Second Quarter can largely be attributed to one exceptionally high-value transaction: Reckitt Benckiser Group Plc of the UK who acquired Mead Johnson Nutrition Company of the USA[1].

We are ensuring that the UK is an attractive place to start, maintain and grow a manufacturing business:

  • Corporation tax will be cut to 19% in 2017 and 17% in 2020 – the lowest rate in the G20. This will benefit over a million businesses both large and small.
  • At Budget 2016 we announced the biggest ever cut in business rates in England worth £6.7bn over 5 years, meaning 600,000 of the smallest businesses won’t have to pay business rates again.
  • An increase in the permanent level of the Annual Investment Allowance from £25,000 to £200,000 from 1 January 2016. This will be maintained for the rest of the Parliament, providing certainty and incentivising investment in plant and machinery. 85% of the value of AIA will go to SMEs.
  • 100% first year capital allowances in enterprise zones extended for three years to 31 March 2020.

[1] http://www.meadjohnson.com/news/press-releases/mead-johnson-nutrition-merger-reckitt-benckiser-completed

Reticulating Splines